Marriage of Convenience or Strategic Alliance? A Case Study on Renault and Nissan

Abstract: Background: Recent trends in the world of business notably globalization and advanced technology have had significant effects on most companies irrespective of size and operations. A major consequence of these trends is increasing competition. This has consequently, increased the need for broader and more comprehensive strategies capable of ensuring the long-term survival of companies. One such strategy is strategic alliances. Strategic alliances provide companies with wider access and utilization of resources that they find difficult to acquire. Purpose: The purpose of the thesis is to achieving a better and deeper understanding of global alliances and how they are coordinated. In so doing the research includes the nature of global alliances in general and the Renault-Nissan alliance in particular. The main focus and case study is the Renault-Nissan alliance but, the researchers also examine the reasons for the failure of the alliance between Volvo-Renault to determine what lessons if any, did Renault learn from this alliance and how these lessons has helped the Renault-Nissan alliance. Findings: The research found that coordination at the operational level of the Alliance was achieved through coordination mechanisms. The coordination mechanisms were responsible for coordinating the resources and activities of both companies at the operational level. These mechanisms are the result of deliberate planning, implementation and monitoring to ensure that they function effectively as required. The research also found that the effectiveness of the mechanisms are greatly aided by factors such as trust, mutual respect, managerial commitment, and learning as well as structures such as the Coordination Bureaus, the Alliance Board and the Alliance Steering Committees. These were consequently labelled ‘facilitators’ of the coordination mechanisms. Finally, It was also found that the role of ‘facilitators’ permeates the entire coordination process. On the basis of these findings and the analysis made thereof, the researchers through analytical generalizations concluded that effective and efficient coordination of resources at the operational level leads to successful strategic alliances, which are achieved through planning, implementation, creation and monitoring of coordination mechanisms.